4.1 Prepare the Income Statement - NSC Accounting - Question 4 - 2016 - Paper 1

To prepare the Note to the Balance Sheet for Trade and Other Receivables, the following components must be included:

Debtors' Control

Debtors' control which is initially listed as $125,000 needs to be adjusted with the calculation:

$$ext{Debtors' Control} = 125,000 - (2,400 + 7,475) = 118,900$$

Provision for Bad Debts

Next, the provision for bad debts should be included and is set at $8,000.

Accrued Income

Accrued income, listing the receivable items, will amount to $110,900.

SARS Income Tax

Finally, provide the SARS Income tax valuation as $134,120.

Combining these, create a comprehensive note as follows:

• Debtors' Control: $118,900
• Provision for Bad Debts: $8,000
• Accrued Income/Receivable: $110,900
• SARS – Income Tax: $134,120

This will ensure the Note reflects the true financial position associated with Trade and Other Receivables.